Glossary of Municipal Securities Terms

MORAL OBLIGATION BOND

bond that, in addition to its primary source of security, is also secured by a non-binding covenant that any amount necessary to make up any deficiency in debt service will be included in the budget recommendation made to the governing body, which may appropriate funds to make up the shortfall. The governing body, however, is not legally obligated to make such an appropriation. Compare: GENERAL OBLIGATION BOND.

Search the Glossary

 

Browse Terms by Letter